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Trump Offers Trade to Asian Nations, But Only If They Play Fair

Nov. 10, 2017
“We are not going to let the United States be taken advantage of anymore.”

President Donald Trump told Asian nations eager for the U.S. to stay committed to the region that he would no longer join multilateral deals like the Trans-Pacific Partnership but would seek bilateral pacts -- and only with countries that played by the rules and didn’t try to exploit the United States.

"The United States is prepared to work with each of the leaders in this room today to achieve mutually beneficial commerce that is in the interest of both your countries and mine. That is the message I am here to deliver," Trump told executives at the Asia-Pacific Economic Cooperation summit in Danang, Vietnam. "I will make bilateral trade agreements with any Indo-Pacific country that wants to be our partner and will abide by the principle of fair and reciprocal trade."

“We are not going to let the United States be taken advantage of anymore,” Trump said.

Trump abandoned the 12-nation TPP -- a pact that would have covered 40% of the global economy -- just days after taking office, saying it threatened U.S. jobs. Regional partners worried the pullout would embolden China. Trump barely mentioned China -- where he just left after meetings with President Xi Jinping -- but made clear he wouldn’t stand for what he called China’s predatory trade practices such as intellectual-property theft.

When the U.S. enters into a trade relationship, Trump said, “We will from now on expect that our partners will faithfully follow the rules, just as we do. We expect that markets will be open to an equal degree on both sides and that private industry, and not government planners, will direct investment. For too long and in too many places, the opposite has happened.”

Trump also said those who play by the rules will be the U.S’s closest economic partners and that the U.S. is seeking friendly ties in the region. “We don’t dream of domination,” Trump said. “We will not make decisions for the purposes of power or patronage.”

In his speech, Trump went out of his way to praise the economic gains in the region, citing specifically Vietnam and the Philippines, which are hosting the back-to-back global summits. Those two nations rank first and second among nations in terms of public confidence in the U.S. president, surveys show.

But Trump’s call for unilateral agreements is at odds with stance of many members of APEC. The Asian nations look to collective agreements to bolster their might on the world stage, and a series of one-off trade deals could undermine that stance.

Trump called the nations in the region "each its own bright light, satellites to none," a subtle jibe at China, which sees itself as the regional powerhouse.

Trump’s decision to withdraw from the TPP, which includes Vietnam along with Singapore, Malaysia, and Brunei, left leaders here looking from Trump to provide reassurance he’s still committed to Southeast Asia. It’s a region that consumes more than $100 billion in U.S. exports each year and where the U.S. conducts dozens of major military exercises on an annual and biennial basis.

The remaining 11 countries in the TPP, from Japan to Canada, are trying to resurrect the pact without the U.S., and their leaders are meeting in Vietnam this afternoon on a potential agreement on how to salvage it. There remain difficulties, with Canada saying it wants a good deal more than a fast one.

The so-called TPP-11 discussions in Vietnam have centered around suspending some parts of the agreement in a bid to move forward without America. On the day he pulled out of the TPP, Trump said the U.S. would stop "ridiculous trade deals" that have hurt its workers and focus instead on pacts with individual countries.

Trump is more popular in Southeast Asia than almost anywhere else, in part because he has shown less interest in lecturing the region’s governments on human rights in the way his predecessor Barack Obama did. He’s signaled he’s less likely to tie those issues to trade and investment decisions.

As Trump visits the region, there is a deep anxiety over whether he looking away. Some Southeast Asian states have long leaned on Washington to provide a buffer against an expansionist China even while expanding economic ties with Beijing.

At the same time, leaders have expressed concern that Trump may upset the delicate security balances that guide the region and, further north, maintain order on the Korean peninsula.

What they need is stability, with a mixed bag of government structures, from one-party states to Communist governments to democracies. That stability is a common goal in Southeast Asia and helps to foster economic growth rates that have often exceeded 5%.

By Justin Sink and Jennifer Jacobs

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Licensed content from Bloomberg, copyright 2016.

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